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Dear sir,
Suppose there is an adjustment that says this“P has accounted for sub’s dividend in other income.”
The answer says the entry to be passed is
Dr. Other Income
Cr. Group retained earningsAren’t we supposed to pass another entry to cancel this intra group transfer?
Also, what entry would we pass if the sub lends a loan to the parent to remove the intra group balances
Thanks.
Don’t have the question in front of me – but all you have to remember is that inter-company divs don’t appear in group accounts. Bear in mind that this sort of topic is examined in FR not SBR – it’s too fiddly for this exam.
Don’t forget that the marks are for explanations not numbers.
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